The Skills Gap

Executive Summary

Even before the U.S. unemployment rate fell to 4.1 percent last year, many companies were reporting a troublesome gap between the skills they needed to run and expand their businesses and the qualifications of job candidates. The disconnect is especially acute in the fields of health care, computer technology and manufacturing, but it exists in a wide variety of industries. Economists warn that a failure to close the gap could have consequences for U.S. competitiveness and economic growth. Some experts argue that these hiring difficulties have been exaggerated and that, where shortages do exist, the lack of skilled applicants is just one of many factors that are responsible. At the same time, policymakers are proposing initiatives that include more apprenticeship programs and a better alignment between educational curriculums and workforce needs.

Among the key takeaways:

The skills gap costs individual companies an average of $800,000 annually in lost business and productivity, one survey found.

In addition to specific training gaps, some employers report that applicants lack “soft skills” such as communications and problem-solving capabilities.

Some economists argue that employers need to revive or strengthen training programs and review their compensation rates to close the skills gap.

Resources for Further Study

Bibliography

Books

“Building America’s Skilled Technical Workforce,” National Academies of Science, Engineering and Medicine/National Academies Press, 2017. A research group explores the best way to give middle-skill employees the training they need.

Articles

Belkin, Douglas, “Why an Honors Student Wants to Skip College and Go to Trade School,” The Wall Street Journal, March 5, 2018, http://tinyurl.com/yddqzrvn. Some top students are forgoing college to pursue a trade.

Freifeld, Lorri, “Bridging the Skills Gap,” Training, accessed April 11, 2018, http://tinyurl.com/yard2bnd. A leading training magazine examines how companies can deal with the skills gap.

Goldman, Jeremy, “Nearly Half of Companies Say They Don’t Have the Digital Skills They Need,” Harvard Business Review, July 28, 2017, http://tinyurl.com/y9p8xfw6. The founder and CEO of Firebrand Group, a New York City consultancy, explores why so many workers lack digital skills.

Streur, John, and George Serafeim, “Stop Waiting for Governments to Close the Skills Gap,” Harvard Business Review, Jan. 11, 2017, http://tinyurl.com/zhc2wx6. Two business professors argue that government can be of only limited help in dealing with the skills gap.

Reports and Studies

“Investing in America’s data science and analytics talent,” PricewaterhouseCoopers and the Business-Higher Education Forum, April 2017, http://tinyurl.com/y7xofxky. A joint report from PwC and the Business Higher Education Forum looks at eight steps businesses can take to find workers who possess strong data and analytic skills.

Cappelli, Peter, “Skill Gaps, Skill Shortages and Skill Mismatches: Evidence for the US,” National Bureau of Economic Research, August 2014, http://tinyurl.com/y8yx4vcb. A Wharton School professor investigates the data behind the skills gap.

Carnevale, Anthony P., Jeff Strohl and Neil Ridley, “Good Jobs That Pay Without a BA: A State-by-State Analysis,” Georgetown University Center for Education and the Workforce, Nov. 13, 2017, http://tinyurl.com/y9y5q9rm. A Georgetown University workforce institute reports on the good jobs available to those without a college degree.

Stephens, Rachael, “Mind the Gap: The State of Skills in the U.S.,” Third Way, July 9, 2017, http://tinyurl.com/ycea36xm. A liberal policy group identifies major skills gaps by looking at a variety of data.

Weaver, Andrew, and Paul Osterman, “Skill Demands and Mismatches in U.S. Manufacturing,” ILR Review, March 2017, http://tinyurl.com/yc8yz6ly. A University of Illinois labor professor (Weaver) and a professor of human resources at the Massachusetts Institute of Technology (Osterman) study the skills gap in manufacturing.

The Next Step

Cybersecurity

Meyrick, Julian, “In Plain Sight: Why Military Veterans Are a Great Fit for Cybersecurity Careers,” SecurityIntelligence, April 5, 2018, https://tinyurl.com/ycwzbmy3. Former military personnel are an untapped pool of ideal candidates for cybersecurity positions, says the vice president for IBM Security Europe.

Rayome, Alison DeNisco, “72% of cybersecurity pros say hiring video gamers could fix the IT skills gap,” TechRepublic, April 3, 2018, https://tinyurl.com/ycpwur7u. Most security managers and professionals agree that video game players offer the best solution to the growing cybersecurity skills gap, according to a recent survey by McAfee, a global security technology company.

Wolff, Josephine, “Gamers Are Not the Answer to the Shortage of Cybersecurity Workers,” Slate, April 5, 2018, https://tinyurl.com/y8f7alx6. In order to expand and diversify the cybersecurity field, managers and professionals should look outside the homogenous pool of video gamers, says a Rochester Institute of Technology assistant professor of public policy and computing security.

Gender Gap

Briggs, Helen, “Breaking the mould in a male-dominated workplace,” BBC News, March 18, 2018, https://tinyurl.com/ycxe8rgm. To expand diversity in male-dominated science and engineering careers, women need support from each other and from academia in spreading the message that such work is interesting and creative.

Kaser, Rachel, “This company aims to solve coder gender gap by getting girls hooked early,” The Next Web, April 6, 2018, https://tinyurl.com/ycydkzt6. A British tech company is launching an academy to educate girls from an early age in coding and other technical skills to rectify the gender disparity in tech and engineering.

Sastre, Maria, “We need more women in STEM — Aviation may be the key,” The Hill, April 5, 2018, https://tinyurl.com/y73jhf8u. Empowering more women to join aviation, an industry where job growth could double this year, is crucial in diversifying male-dominated STEM fields, says the president of an aviation company.

Georgetown University Center on Education and the Workforce 3300 Whitehaven St., N.W., Suite 3200, Washington, DC 20007 1-202-287-7766 https://cew.georgetown.edu/ An independent research and policy institute that studies the link between education, career qualifications and workforce demands.

Lumina Foundation30 S. Meridian St., Suite 700, Indianapolis, IN 46204 1-800-834-5756 www.luminafoundation.org An independent foundation committed to making opportunities after high school available to everyone.

The Manufacturing Institute733 10th St., N.W., Suite 700, Washington, DC, 20001 1-202-637-3426 www.themanufacturinginstitute.org Association that works to change the image of manufacturing and attract workers to the industry.

National Association of Colleges and Employers62 Highland Ave., Bethlehem, PA 18017 1-610-868-1421 www.naceweb.org Organization that connects college career-service professionals, recruiters and businesses and provides employment information and career and market trends.